Polymetal could commission POX hub in Kazakhstan in 2028, capex $700 mln-$800 mln

ASTANA. Sept 21 (Interfax) - The Polymetal board of directors could approve the budget for the investment phase of the POX hub project in Kazakhstan at the end of 2024; the autoclave would in the baseline scenario be delivered to the site in the summer of 2025 and start operating in the summer of 2028, the gold and silver miner's CEO Vitaly Nesis told Interfax.

"We will update the estimate taking into account the relocation of the site to Kazakhstan, where prices for building materials are different, and some technological aspects will also change. Again, inflation must be taken into account. But I believe $700 million-$800 million is a fairly accurate estimate," Nesis said, when asked about project capex.

The new hub will process concentrate from the Kazakhstan-based Kyzyl field and purchased feedstock.

"Given that we want to duplicate, if possible, all design solutions of the second stage of the Amursk POX hub, the capacity will be set at 250,000-300,000 tonnes of concentrate per year, depending on the sulfur content. Kyzyl will provide 60% of the feed, the remaining 40% will be sourced in the markets of Central Asia and Western China. We are still five years from launch, so the task is quite feasible. Moreover, Kazakhstan has declared a major increase in investment for the mineral development, and the gold mining industry in Kyrgyzstan is developing actively. I think the new plant will easily be fully utilized," Nesis said.

Polymetal currently processes concentrate from the Kyzyl field at the Amursk POX hub in the Khabarovsk territory. But the company is now looking for buyers for its Russian assets. Polymetal expects to continue to process the Kyzyl feed at the Amursk hub under a tolling arrangement until the plant in Kazakhstan is built.

"There'll be a tolling agreement. It has already been concluded, and its long-term conditions are being cleared with the regulators. That is why the choice of counterparty in a transaction for the sale of Russian assets is important - we need to minimize the risk of processing the concentrate for Kyzyl," Nesis said. "This aspect of the transaction, in preliminary communication with potential buyers takes a lot of the time we have available perhaps even more than, for example, conducting the cost assessment," he said.